How We Started The Largest U.S. Matcha Green Tea Supplier And Grew It To $100K/Month

Published: May 8th, 2020
Andre Fasciola
Founder, Matcha.com
$708K
revenue/mo
2
Founders
15
Employees
Matcha.com
matcha.com
from Tucson, Arizona, USA
started January 2016
$707,997
revenue/mo
2
Founders
15
Employees
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Hello! Who are you and what business did you start?

Hi! My name is Andre Fasciola and along with my business partner Dr. Andrew Weil, M.D we founded matcha.com. We source and sell some of the highest quality matcha available. Our line of ceremonial grade matcha teas (are) some of the most sought after grades of matcha tea outside of Japan. Each grade of matcha is carefully selected by hand by our 5th generation tea master.

Our customers are both domestic and international. We have customers that range in age from 18 - 75. Anyone that is interested in a healthy alternative to coffee, sugary energy drinks, and sodas (will) love matcha. Matcha is not only healthy, but it also provides 4-6 hours of calm sustained energy. Unlike coffee you don’t have the overdose jitters nor do you have the crash.

We are (now) the largest supplier of ceremonial grade matcha in the US. A distinction that speaks to our commitment to preserving the traditions of matcha’s ancient culture, and at the same time educating our American customers about all things matcha. From how to make great matcha to how to distinguish between imitation matcha (yes, there is such a thing) and high-quality matcha. Our monthly revenue is $100K.

how-we-started-the-largest-u-s-matcha-green-tea-supplier-and-grew-it-to-100k-month

What's your backstory and how did you come up with the idea?

I grew up in a military (family) which allowed me to travel all over the world. This was challenging at times but it was also (provided) a world-class education in that it taught me a tremendous amount about other cultures. It also taught me the importance of listening to the perspectives of others. This has served me very well in life and in business.

Systems are vital. You need to think long and hard about building the systems that will replace you so that when you scale you can remove yourself from the operations and focus on growing the business.

I was fascinated by all things Japanese (every) since I took my first martial arts (lesson) in my teen years. It came in handy each time I met the school bully at each new base we moved to. We eventually settled in the US and I started on my entrepreneurial path. My first trip to Japan came in 2007 when I traveled with my business partner Dr. Andrew Weil. It was during this trip that I first had great matcha green tea (it was not available in the US at that point - at least the good matcha that is). I became transfixed by its brilliant green color, the ancient culture surrounding it, and how it made me feel after I drank my first bowl. When we returned to the US we searched for the same level of quality but it was nowhere to be found. Thus an idea was born.

We know we would have to overcome (several) challenges if we were to be successful in the US. One, of course, was finding a great source of matcha and the other was educating the American consumer about all things matcha. One can not just fly to Japan and knock on a matcha farmers’ front door and ask to buy his matcha. They will not even talk to you. If by some chance you do make a connection it’s probably going to be a 3rd party wholesaler brokering a low grade of matcha. One thing to note - about 80% of all the best matcha grown in Japan stays in Japan for their consumption.

Japan is in many ways a very traditional culture in the sense that you need to know the right people, be introduced to the right people. These connections are facilitated based on trust and reputation. One has to earn trust and respect. They also need to know that you are serious and that you will honor the work and effort necessary to have access to the best matcha. Let’s just say it took us a solid few years to build those connections.

Once we connected with a farming family that’s been producing high-quality matcha since 1602 we started bringing in samples to the US for friends and family. Our matcha even won a few prestigious tea competitions in Japan. We knew we had the right matcha.

how-we-started-the-largest-u-s-matcha-green-tea-supplier-and-grew-it-to-100k-month

Take us through the process of designing, prototyping, and manufacturing your first product.

Matcha is like a fine wine. Terroir is very important. The best matcha comes from the hillsides of Uji Japan - long known as the world’s best growing region for high-quality matcha. Uji is located between two mountainous areas creating a perfect microclimate and just the right growing conditions for producing great matcha. Hot days, cool nights, and the right volcanic soil make Uji a perfect place for growing the best matcha. For over 1,000 years this region has been famous for producing the best matcha in the world. It took us a year of tasting a variety of different matcha teas for us to finally pick the top 6 matcha which we carry to this day.

Great matcha is harvested by hand once a year. This picking is called the “First Harvest, or “ the first tea of the year.” It usually happens in the first week of May and continues for several weeks. Once the matcha is hand-picked, it is processed (if you want to know more go to our website) according to a time-honored tradition. Producing matcha is a very labor-intensive process. It takes 1 hour to produce 30g of matcha. Which is another reason why great matcha is expensive?

Once we decided on the ceremonial grades we would carry we set out to secure our supply chain and start importing matcha to the US. It was a steep learning curve. Brokers, importation requirements, FDA approval, USDA applications, FBI background checks, etc.. It’s not for the faint of heart.

Describe the process of launching the business.

One of the first requirements of getting this business up and running was that we needed to secure matcha.com. Without it, my business partner was not 100% confident we could make this business work. At that time matcha.com consisted of hundreds of images of one specific cat! How I got matcha.com is a story in and of itself. Let’s just say it involved a bit of black hat sleuthing, a private investigator, a top Japanese model, a local policeman, and a local Yakuza.

Our seed capital came from friends and family. We raised about $60K to get things started. All of that pretty much went into developing the website and designing the packaging. We raised funds from Dr. Weil and our other business partner Kevin Rose. The second round of funding came from inhouse and that went into placing our first major order of matcha.

We had a soft launch in 2017. Our goal was to test our supply chain, our fulfillment process, and the market as a whole. Things were slow in the beginning as we learned where to find our customers (who they were) and how we needed to communicate our message to them. We tried a variety of tactics to bring in sales and raise awareness for our brand. It was a combination of hustle, paid advertising, social media blasting, and giving away a ton of free matcha.

Lessons learned… Don’t wait until you’ve perfected your packaging, your messaging, your website before getting it out there. Adjust and pivot on the fly or else you’ll never get it launched. Also, negotiate the price on everything. Remember the answer is always no until you ask. Paid advertising is like dumping a 5-gallon bucket full of water into the sand. You’ll be asking yourself in no time where did it all go?

how-we-started-the-largest-u-s-matcha-green-tea-supplier-and-grew-it-to-100k-month

Since launch, what has worked to attract and retain customers?

My recommendation to other founders is to find what you love to do and figure out a way to make money at it. There are many days where I find myself grinding it out, and if I did not have a massive amount of passion for our customers and our matcha mission I’d probably burn out. I like the advice from Tim Ferris, “look at your credit card statement and see what you spend the most on.”

Systems are vital. You need to think long and hard about building the systems that will replace you so that when you scale you can remove yourself from the operations and focus on growing the business.

Podcasts have been massive for us. We were very fortunate to have our co-founder on the Joe Rogan podcast. That was a massive boost to not only the business but also in getting our brand in front of 10 million people. We’ve made our way onto several podcasts and in doing so have introduced us to each podcasters’ customer base. My recommendation is to reach out to every podcast out there until you get some traction. Many podcasts are open to a revenue share, affiliate links, or other types of revenue sharing. Just start reaching out - or better yet, create your own podcast.

Find someone that is crushing it and follow their lead- and don’t be afraid to reach out to them for guidance, help, and advice. You would be surprised to how up they might be.

We’ve also found great success in our “Journal.” We consistently write 2 full-length journal articles every week. We talk about a wide range of health and wellness topics that not only educate our customers but also serves as a way to share our brand values and connect with our audience - beyond just trying to sell them matcha green tea. Each article is posted on all of our social platforms and on Linkedin, Quora, and on partner blogs.

As far as social media, we work with micro-influencers a lot. Typically they have less than 15K followers. Any more than that you get into a range where it gets expensive - and, oftentimes does not create a great ROI. Big influencers, in my experience, rarely move the sales needle as most potential customers see that it’s mostly an attempt from them to try to sell you something. It’s not authentic and people can pick up on that right away. Find micro-influencers that share similar values as your brand. Reach out to them and trade products, ideas, and followers. We’ve had a lot of success teaming up with other brands and launching co-promotions (giveaways) and even creating products together. You don’t need to spend a dime on social media to find success. All it takes is a bit of bravery and hustle.

Paid advertising is a minefield. FB ads especially. Without going into a ton of details - FB ads (in my experience) do not provide a good ROI at all, and Google Adwords are marginally better. Having spent over $200K on ads over the last 24 months If I had to do it all over again I would have used that spend to create new content and in building alternate ways to reach our customers where they are.

Find free channels and crush those before you jump into the paid advertising. This will ensure that you will iterate until your brand messaging is fully developed. We’ve had good traction with Youtube, TikTok, IG, and others. All free.

Only work with a digital ad agency that gets paid based on performance metrics. Meaning, they get paid a % of revenue. If they don’t perform they don’t get paid.

Leverage your email list. I can't stress how important our email campaigns have been for us. Each blast we send has about a 100% ROI. Build your list, nurture it, and it will crush it for you. This can be an entire article all by itself.

We purposely made a decision to avoid Amazon for the first few years of our business in order to develop our messaging, our branding, and our customer base. Also, we made a decision early on that we needed to protect our margins to fuel our growth, and we did not want to prime (no pun intended) our new customer to shop off of a low price point. Amazon seems to be a race to the price button. If we launched on Amazon (initially) we felt it would lower the perceived value in our brand.

Now that we have a very strong customer base we just recently started selling on Amazon. Mostly to further develop our SEO and brand awareness, and to create another revenue channel. Having delayed our Amazon store worked out for us very well. Once we built a strong brand that gives us a massive audience to direct to our new Amazon store (which Amazon likes to see - a lot of traffic all at once), and we avoided the COVID19 Amazon shut down. I have many friends that have 7 figure Amazon businesses that went to $0 in revenue overnight. Granted this is an extraordinary situation but it does illuminate the fact that having one (relying on) sales channel is not a good strategy.

To be honest, working with Amazon in building our new store has been a complete pain in the ass. I’ll leave it at that.

Oh ya, lock down your fulfillment or it will cost you a ton of much-needed cash. It’s a costly mistake.

How are you doing today and what does the future look like?

Fortunately, we are doing very well and we remain profitable. We feel that people are looking to make healthier choices, especially millennials. Now more than ever. Matcha is an excellent replacement for sodas, sugary energy drinks, and coffee. Now that we're in the middle of COVID19 pandemic matcha has really taken off as a booster to immunity, and on top of that, it makes you feel good when drinking it.

We’ve grown year over year at a 300% growth rate. We started off small and we run a tight ship. Most of all our profits go back into the business. I draw a very small salary (against my wife’s wishes:) and we keep expenses low.

Our website traffic has also grown a few hundred percent YOY. It’s now starting to grow exponentially. It took about 3 years to gain some serious traction.

We’ve outgrown the last two fulfillment houses due to our growth. We’re now in the process of negotiating with one of the largest fulfillment networks in the US, and internationally. We’re investing in a big push internationally which requires a massive fulfillment network to take us there. Our Canadian business is really starting to take off and we want to be ready to support that growth.

We are about 90% online and 10% wholesale. That is about to change as we just hired a Director of business development to execute on our Brick and Mortar strategy. We’ve been approached by a high-end national retailer that wants to carry our product line.

Short term goals are to continue to execute on our online strategy (3-5 years). In addition, we have a new product line that should launch this year. It will really change how people enjoy matcha.

Our long term goal is to make an acquisition or two in the next few years. Our plan is to have 50% or more of the US/Canada matcha business by 2023. We are in the top 3 online matcha businesses on the internet right now. There are a few legacy brands (over 100 years old) that have been around for decades that take a lot of the oxygen right now.

how-we-started-the-largest-u-s-matcha-green-tea-supplier-and-grew-it-to-100k-month
Back in the day. My wife and I filling orders in our garage after the Joe Rogan podcast. We had so many orders that our fulfillment house asked us to help fill orders

Through starting the business, have you learned anything particularly helpful or advantageous?

I don’t look at it like we made mistakes. I look at it like some things work better than others, and some things that did not work at all.

Some things that come to mind - we once paid a lot of money to a PR firm to connect us with 10 big influencers. We received $0 in sales from all 10 campaigns. That was a big lesson for us.

Being sincere in your messaging and building great content wins every time over paid advertising. One is way easier than the other one.

Keep track of all your costs. They add up quickly, and remember - EVERYTHING is negotiable. That goes for software, consultants, rent, fulfillment costs, EVERYTHING. Get a good lawyer and a good tax accountant.

Also, I try not to be hard on myself when I don’t know how to do something or I don’t have the knowledge to figure out something. You can’t go to school to learn how to be an entrepreneur (despite what Warton says), It’s 10% skill and 90% hustle. You don’t have to know everything you just need to know where to go to find the information you need. I try to surround myself with people more skilled than I am at tasks I’m not good at. Also, pay those people who are smarter than you very well.

You’re only as good as the 5 people you hang out with. Find a mentor or a mentor group.

I’m not as smart as some but I’ll outhustle most!

What platform/tools do you use for your business?

Go with the free stuff first. Google Analytics, Gmail, Gdrive, Gtalk, etc.

We have had a good experience with Shopify. I’ve used other ecomm platforms but Shopify is the most evolved and they are getting better and better.

Klaviyo is the most comprehensive email platform out there. Master it and your business will crush it.

I don’t really use productivity tools. I know what I need to get done and I do it. Using apps and tools to hack productivity just ends up causing more friction in my day. Maybe I’m old school but I feel like those things are for the people that make a business out of preparing to do things.

What have been the most influential books, podcasts, or other resources?

There are tons of great books and free resources. Too many to list here.

I’m a massive fan of Dr. Weil and if you don’t know him to look him up. He’s written some amazing books that have changed my life and the lives of millions of Americans.

If you need motivation read or listen to David Goggins “Can’t hurt me.” Or, anything TONY ROBBINS! He’s the man!

Look up the School of Life on Youtube.

Advice for other entrepreneurs who want to get started or are just starting out?

My most favorite quote is “If it’s meant to be it’s up to me!” The best advice that I could give is to never give up. Find a problem (of substance) and set out to solve it. Starting a business with the sole purpose of making a ton of money is not sustainable, and probably won’t be successful in the long run. Find someone that is crushing it and follow their lead- and don’t be afraid to reach out to them for guidance, help, and advice. No one is better than you - just further down the road.

Momento Mori!

how-we-started-the-largest-u-s-matcha-green-tea-supplier-and-grew-it-to-100k-month
Me and the “WIMHOF.” He’s the real deal

Where can we go to learn more?

Feel free to reach out to me with questions, comments, or biz opportunities at [email protected]

Stay tuned as we are releasing our new podcast/Youtube videos called the Matcha Project!

If you have any questions or comments, drop a comment below!

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